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Egypt Handover Ceremony Won’t End Mursi’s Army Struggle

Egypt will swear in its first freely elected president tomorrow, completing a chaotic transition to civilian rule while leaving question marks over how he will share power with the generals who have run the country since the fall of Hosni Mubarak.

Mohamed Mursi will take the oath before Egypt’s highest court, his office said late yesterday, ending a dispute over the venue. He will then address the nation from Cairo University.

Mursi’s background, as a member of the long-suppressed Muslim Brotherhood, marks him out from his predecessors, all military men. So does his route to the job via a free election in which he defeated Ahmed Shafik, a former air force commander and premier in the last days before Mubarak’s ouster in a popular uprising in February last year.

The generals who ruled Egypt in the interim between Mubarak and Mursi acted to expand their powers at the expense of the presidency immediately after polls closed on June 17. The move sparked protests by the Brotherhood and some secular activists, and may signal a prolonged contest for power which could set back recovery in the country’s battered economy.

“What happens over the next few months, in terms of the type of government that emerges and the reaction from the military, will basically define if this is the turning point we’re all hoping to see in Egypt or not,” said Said Hirsh, an economist at Capital Economics in London. “A very broad coalition partnering with the other major parties could potentially curb the powers of the military.”

Court Defeat

The debate over where Mursi would be sworn in to office illustrated how much remains undecided in post-Mubarak Egypt. The choice of the court is a defeat for the Brotherhood, which argued he should be sworn in before the elected parliament. The assembly was ordered dissolved by the military council in line with a constitutional court ruling earlier this month.

In another sign that the contest for power isn’t over, the Brotherhood was taking part in street protests against the army council’s moves even as Mursi prepared to take over from the generals.

The president-elect spoke to tens of thousands of Egyptians in Tahrir Square today, telling them they are the source of all authority and determination. He said he was addressing all Egyptians, Muslims and Christians, as well as Arabs in the wider region.

‘One of You’

“I appear before you without a bullet-proof vest,” Mursi said in remarks aired on Jazeera TV, adding he felt safe among his people. “Resilient revolutionary men and women, boys and girls, I am one of you. I always was and always will be.”

Mursi swore a symbolic oath of office, pledged to build a constitutional, civil and modern state and alleviate the suffering of all Egyptians. Those who supported his election and those who didn’t will be treated equally, he told the crowd, promising to respect the constitution and eliminate corruption and injustice. He also remembered martyrs who “made great sacrifices” for freedom and warned that Egypt will respond to any aggression against it.

The president-elect sent a clear message to the military, saying he won’t compromise or forsake any of his rights as the country’s leader, that he feared “only God” and there is no authority above the people. Egypt’s foreign relations will be determined on the basis of dignity and sovereignty, he said.

Women, Christians

The Brotherhood is joining other groups in protests demanding that the dissolution of parliament and the decree expanding the military council’s powers should be reversed, its secretary-general, Mahmoud Hussein, said in a phone interview. The Brotherhood controlled almost half of the assembly’s seats after winning elections that ended in January, and the absence of a legislature will deprive Mursi of an ally.

Mursi says he will reach out to women and Christians to overcome concern among some about the imposition of Islamic law. He faces a challenge in winning over a public that has been polarized by more than a year of tussles between the generals, Islamist politicians led by the Brotherhood, and the largely secular activists that led the uprising.

The election runoff between Mursi and Shafik was widely seen as a contest between Islamists and the old regime, with many Egyptians including some of the youth activists rejecting both options.

‘No Trust’

“There’s no trust,” said Emad Gad, a political analyst and a secular lawmaker in the disputed parliament. “If they work toward monopolizing power, it would be difficult to envision any kind of cooperation,” he said of the Brotherhood. “If they accept to share power” then secular and liberal parties may be able to work with the group, he said.

Egypt’s financial markets have welcomed Mursi’s victory, which averted the risk of renewed violence if Shafik had been declared the winner.

The benchmark EGX-30 stock index has gained 17 percent in the week since the election result was announced. Yields on Egypt’s benchmark dollar bonds have dropped more than 1.2 percentage points, to about 6.6 percent.

The economy, though, has struggled since the revolution as tourists and investors stayed away. The central bank spent more than half its currency reserves, as it sought to prop up the pound, while unemployment has risen since the uprising.

The budget deficit may widen to 10 percent of economic output this year, the most among Arab nations, according to the International Monetary Fund.

No Money

“Shortages during Ramadan and inflation in the back half of this year will test people’s patience sooner rather than later,” said Crispin Hawes, director for the Middle East and North Africa at the Eurasia Group, which monitors political risk. “There’s an unequal equation here. There’s an expectation that the government will spend a lot more money and the money isn’t there.”

Mursi is “still looking” at the option of getting a $3.2 billion IMF loan, and talks on the credit will continue after they were put on hold during the election, his adviser Yasser Ali said yesterday.

The new president will take on these challenges under a level of scrutiny unthinkable in the Mubarak era. Even before he was sworn in, a Mursi Meter website was set up to monitor his performance “by documenting what has been achieved as opposed to his promises” during the first 100 days of his rule.

Tackling Problems

Mursi has set an agenda for that period that includes tackling chronic problems that plague everyday life in Egypt, including traffic and cleaning up the piles of garbage that sat untouched for months.

Those benchmarks may determine whether Mursi can satisfy the desires of the people who elected him. Some of them were standing in line outside the presidency in the upscale Cairo neighborhood of Heliopolis yesterday, hoping to be allowed in to meet the new leader.

“We finally have someone who thinks of Egypt instead of himself,” said Samir Abdel-Meguid, a 45-year-old accountant. “Even if it turns out to be an act he’s putting on for now, it would be good if he actually does fix some of the problems here.”

To contact the reporters on this story: Mariam Fam in Cairo at mfam1@bloomberg.net; Tarek El-Tablawy in Cairo at teltablawy@bloomberg.net

To contact the editor responsible for this story: Andrew J. Barden at barden@bloomberg.net

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